U.S. rates futures slip as stock market gains

NEW YORK (Reuters) - U.S. short-term interest rates futures fell on Monday as Wall Street jumped after the FBI said Democratic U.S. presidential nominee Hillary Clinton would not face formal charges after a review of recently found emails.

Renewed focus on Clinton's use of a private email server while secretary of state had led traders to downgrade her chances to win the White House in Tuesday's election.

Polls showed Clinton's lead over Republican rival Donald Trump narrowed after FBI director James Comey sent letters to U.S. lawmakers on Oct. 28 about the discovery of the emails.

A Trump win has worried some investors given his comments about trade which they see as protectionist and would hurt the dollar.

Some traders have speculated that if Trump were to capture the presidency, causing tremendous market turmoil, the Federal Reserve may refrain from raising interest rates at its Dec. 13-14 policy meeting.

Sunday's FBI news is viewed as supportive to a Clinton victory, which ignited purchases of stocks and other risky assets worldwide.

"The big news over the weekend is the FBI’s announcement clearing Clinton once again: based on their review of the recent email find, Comey announced the FBI’s July position remains - that Clinton should not face formal charges," RBS Securities strategists wrote in a research note on Monday.

Federal funds futures were 0.5 basis point to 4.0 basis points lower than Friday's close.

They implied traders saw about a 76 percent chance the Fed would raise rates next month, up from 67 percent late on Friday, according to CME Group's FedWatch program.

Major U.S. stock indexes opened sharply higher with the S&P 500 gaining 1.5 percent. <.SPX>

(Reporting by Richard Leong; Editing by Meredith Mazzilli)

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